Good evening StockBandits!
Overnight futures saw some initial weakness Sunday evening but ultimately the Crimea vote to become part of Russia was met with some aggressive buying. The tide turned positive during the night, and the strength persisted this morning to produce a gap higher and some follow through during the first 40 minutes of trading. That was all she wrote in terms of upside, and from there stocks simply drifted laterally for the remainder of the day. We actually saw weak finishes for both the NAZ and RUT, which is interesting given they held their support zones better than the blue chips last week.
The pullback we’ve just gotten has been a healthy one, and much-needed after the price runup from the February lows became too extended. The reset has alleviated the overbought conditions to pass, and the test we discussed last night for the NAZ and RUT has apparently been passed – for now. That doesn’t completely give the bulls the green light, as the weak finish today still leaves some doubters. But, the bulls are marching upward again, so we’ll give them the benefit of the doubt until we see technicals which warrant another opinion.
The FOMC is set to meet tomorrow and Wednesday, with the announcement and policy statement coming on Wednesday. That’s the main event for now, and given today’s big move, it wouldn’t be real surprising to see the market attempt to rest tomorrow as it awaits the next potential catalyst. With very few setups available tonight, I’m looking to limit my activity.
Let’s get to the charts.
NAZ – The NAZ finished 5 points higher than where it opened today (4279 vs. 4274), showing some limited intraday buying. The gap held though, despite a weak finish. It has a little breathing room for now, but a slip from here would likely bring a quick test of 4246.
SP500 – The S&P showed strength today and reclaimed 1850. Here again, upside volume was lacking, but price finished closer to the highs than the lows. Now the bulls need to show some follow through if they’re for real, as the previous bounce we saw last Wednesday lasted only a single day.
RUT – The RUT closed weak today but still in the green, back above 1182. Any weakness from here and we could easily see this index head back to last week’s lows. For now, the bulls have a short-term higher low in place and an opportunity to rally back toward the high.
DJIA – The DJIA led the way today as all 30 of its component stocks finished in the green. It was a strong day, but there’s still ample room to rally here before the next resistance level of 16505 would be met (the lower high on this daily chart).
Notable Names:
IOC was listed here last night but couldn’t punch through $62 despite a pair of tests. I’ll give it another shot tomorrow as a single-day play, this time with a trigger just slightly higher at $62.05.
NTI is sitting in a bull flag here and is resting on quiet volume. That’s a positive look and it allows for volume expansion on any turn back up out of this base. I like this setup for a single-day play on the long side if it can clear the upper flag trend line on Tuesday at $27.35.
CPT is at upper resistance within this ascending triangle pattern and could break out any day now. I’m interested in participating in the initial breakout if it happens on Tuesday, so this will be a single-day play for me on the long side if it’s able to clear $67.60.
SCTY is still on my list for a single-day play on the short side for Tuesday. Today it remained weak in spite of broad market strength, so I’m still watching short-term support for a breakdown at $72 to spark more selling.
DGI sold off hard a few weeks ago, bounced back partially, then broke rising support last week. It’s now sitting at short-term support and I’m interested in a single-day play on the short side if it breaks $31.10. The recent low stands near $29, so there’s room here for a quick retreat.
New Swing Trade Candidates:
No new swing candidates tonight, staying with light exposure for now while waiting for bases to mature for trades. Until then, single-day plays can offer some cash-flow but most charts need more work.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
